The U.S. personal savings rate for the first quarter of 2012 dropped to its lowest level since the start of the recession. Americans stashed away 3.6 percent of personal income in the first quarter, down from 4.2 percent in the fourth quarter and a near-term peak of 6.2 percent in the second quarter of 2009. Which of the following could explain this drop in savings?
A) a decrease in wealth from a fall in stock prices
B) a rise in the real interest rate
C) an increase in disposable income as the job market recovers
D) a rise in consumer confidence that their incomes will be higher in the future

Question

Quizplus · Accepted Answer

A rise in consumer confidence that their incomes will be higher in the future could lead people to save less, as they feel more secure about their financial situation and are more willing to spend.

The US Personal Savings Rate for the First Quarter of 2012